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Does Pay Per Click Advertising Still Pay?

Does Pay Per click advertising still pay?:In theory, using the search engines sponsored Pay Per Clickadvertising is a quick and easy way to provide instant andtargeted traffic to your web site. And historically this hasalways been a good option for new web sites that donâ€™t have anyother way to get traffic.

Buying traffic via a Pay Per Click can be a viable way to getinstant-targeted traffic. And a few years ago it was quite costeffective. It was fairly easy to hit a 4-6 times pay through(spend R100, sell R4-600) on a well-designed campaign. Now itâ€™stough to get 2 or 3 times your investment back.

Why is it so difficult to get a good payback now? There areseveral factors that can have a huge impact on results.

Competition â€“ There are many more advertisers and web sites nowvying for the same keywords

Affiliate Sales â€“ These are folks who advertise products forothers and make a commission on the sales

Google Crack Down â€“ Google has realigned their algorithms toinsure more accuracy in search results

Google CTR Factor â€“ If you donâ€™t get a good ratio of clicksverses views, your cost goes up

Also throw in the fact that you need to write a short ad (25characters for the headline, 35 for the two lines of copy) thatgets clicks, and find keywords that are very target drivenbefore you even get to the cost.

These factors have all caused the price of a keyword toskyrocket. If you look at a basic R35 digital product and belowprice level, itâ€™s getting pretty tough to make a profit on highcost keywords. And consider the fact that many web sites sell aphysical product that may only have a 50% markup, this can getreal ugly if your campaign is tight (low return).

Just so we all are on the same page, letâ€™s look at the basicgoal of PPC campaign. Itâ€™s all about the conversion rate.Thatâ€™s how many products you sell per the number of visitors(200 visitors and 4 sales gives you a 2% conversion rate).

You need to determine if the keyword cost will pay through onthe revenue generated by the sales (example: if each clickcosts you .35, and your product sells for R35.00, and you onlyconvert 1 in 100 - you will lose money). Keep in mind that youwill normally pay 2-6% to your payment processor so even thoughR35 is paid you only net R33 or less. So if you spent R35 on 100clicks, you just went backwards.

Which means if you have a R35 product, you need to convert atleast 2 out of 100 to make a profit on the campaign. Severalyears ago it was very possible to stay around .05-.25 perkeyword click cost. Now it is much more difficult to findkeywords below the .30 and many times itâ€™s much higher thanthat.

There are other means to improve your conversion rate. Awell-written and effective sales pitch can increase sales.Running promotions, offering special incentives, and offeringsolid value helps too. I know people who get a 6% conversionrate so it is possible to have a larger budget for keywords.

I also know people who have no problem spending R1000 to makeR2000. If you look at it in a pure business sense, youâ€™redoubling your money. But if something goes awry, or Googlemakes a right turn and you still go straight ahead it can getdarn expensive.

I know folks who are spending R3-4,000 a day on their PPCcampaigns. And they are at least doubling and more the returnon investment. But the sad thing is they used to spend R1-2000a day to make the same amount of money. So in many cases thecost has doubled, the profit remained the same.

This does cut a lot of people out of the game. Between the highdollar costs and the lower return, many wonâ€™t or canâ€™t risk thattype of money. And learning how to find the right keywords, andthen write an effective ad is no walk in the park for most.

Pay Per Click advertising can and does work. But you reallyhave to have a well thought out campaign from start to finish.Good products, sales pitch, incentives, keyword research,effective ad writing, and conversion rates that can pay throughare necessary now more than ever with the high costs.

But you should have a well-rounded marketing plan that includesPPC along with other methods to bring targeted visitors to yourweb site. Organic search engine traffic (basic SEO), a goodlinking strategy, and even offline advertising are allnecessary for generating a constant stream of potential buyers.